Desperate SBAB appeals to the Riksbank: “Don't raise too much” – now a house price crash is expected

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Published 25 January 2023 at 08.39

Economics. The Swedish housing bubble is expected to burst completely when the Riksbank raises the key interest rate by 0.5 percentage points on February 9. But now the state-owned SBAB wants the Riksbank to take a chance on the fact that inflation has already peaked and not raise the interest rate as planned, the mortgage giant writes in an appeal.

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Instead of the expected increase of 0.5 percentage points, SBAB is calling for an increase of 0.25 percent and a paused amortization requirement for everyone, in order to put a splash on housing prices again.

– The underlying inflationary pressure may have peaked now, says Robert Boije, chief economist at SBAB, to TT.

There are no figures on that. At least not the core inflation figures from Sweden. But in countries with 6 percent interest rates, such as the USA, the underlying inflation has long since peaked.

– You shouldn't take in until you vomit, Stefan Ingves has said that himself, Boije further told TT.

It is not the first time that SBAB has a more positive view of inflation than other experts.

– We do not see any dramatic increase in inflation ahead of us, said the same Robert Boije, for example, in a reassuring message just over a year ago, when inflation was 2.8 percent.

After that, CPI inflation quickly rose dramatically to 12.3 percent, where it stands today.

The housing bubble

  • Villa owners in Stockholm lose 5,500 kroner a day to live
  • "Never have so many Swedes lost so much money in such a short time"
  • House prices continue to fall by three percent a month
  • The price drop for housing was 15 percent in 2022
  • Where another young person needs to sell if variable mortgage rates reach 6 percent

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